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On or about 2 Oct 2018, Hong Leong Asia (HLA) issued $0.54 per share for the share holders in the ratio of 1:1 meaning if you had 40,000 shares you will be issued with 40,000 number of rights shares provisionally alloted. The closing date was 19 Oct 2018.
Renounceable non-underwritten rights issue (rights issue) of up to 374,678,559 new ordinary shares in the capital of the company at an issue price of 0.54 cents for each rights share, on the basis of one rights share for every one existing ordinary share in the capital of the company held by entitled shareholders as at the books closure date 2 Oct 2018 at 5 pm.
Ironically, the shares were traded around $0.54 cents until 19 Oct 2018, Fri.
On 22 Oct 2018, Mon, the shares surged to $0.625 cents before closing at $0.615 cents with a percentage increased of 12.8%.
One must be wondering why when more shares are issued the price goes down instead of going up. Here, the institution is probably forcing the existing holders to sell their shares when they hammered the price down to 0.545 cents to force the existing holders to sell to them through FEAR. Once they got hold of almost all the existing shares, they could move the shares up with ease because there are not much sellers left.
In trading, always exit a position once you lose 10% because treacherous manipulations can always happen. Capital preservation is the key.
Buy only stocks that are above the moving average 200 but not too far away as the stocks always snapped back due to profit taking. If you buy below the moving average 200, only buy on rebound (dead cat pounce) but be prepared to exit fast because the big players/syndicates have left. If you not fast to exit, you will be trapped and suffered a gargantuan loss because some stocks never rebound. Thus be very careful if you are going against the trend.
Volume
Whenever the volume spikes or increases especially when the price is going up, be careful that the syndicates are also making an exit when the retails are rushing in. Syndicates accumulate the stocks in a covert, low profile, clandestine manner in which the volume and price is not conspicuous, or dull. When the price and volume spikes, that's when the syndicates lure and bait the retail investors. So when the volume and price spike, be careful. If the price is far from the moving averages, that is, parabolic, especially the MA 5, get ready for an exit.
Similarly, if the price is sideway and below the MA 200, the syndicates will exit in small volume so as not to alarm the retail investors. Once the bulk of the syndicates inventories/stocks have exited, the price will capitulate as there's no more support. Take cognizant that when the price is moving up, the syndicates are also selling out using the retail as good cover by masking their exits. By the time the retail investors realise, they could have suffered gargantuan losses.
Hence trade with the trend. Buy above the MA 200 but not too far from it. Buy when the volume is low. Buy when the price fluctuation is narrow. Buy only good quality stocks. Buy government linked stocks to lower the risk. Buy ETF which would not go bankrupt, issue rights suddenly and unexpectedly with the intent to ambush the retail investors. ETF is more transparent and not so treacherous.
So buy with the trend, above the MA 200, on retracement or support (horizontal or diagonal) to a MA or support, low volume and low price fluctuation, that is, small bars or candlesticks. When the price and volume fluctuates widely, that is, big bars and candlesticks, it's time to be careful and exit because the syndicates are making use of this wide movement of volume and price as escapes, exit or profiteering
Same when selling or exiting below the MA 200. Sell on rebound or dead cat pounce on the MA or resistance (horizontal or diagonal). Take note that if there's no rebound you will be trapped. Hence have a timeline to exit, maybe within 3 to 5 days, if the stock don't move. The syndicates sometimes do it on this manner with high price spikes and volume when they have too much to sell at a relatively short time. Sometimes they also sell in small volume with low price fluctuations with alarming the retail investors.
HLA five year weekly chart till 22 Oct, 2018, Monday. Chart Courtesy of RHB
Chart Courtesy of RHB which gives very good charting.
Hong Leong Asia is a treacherously manipulated counter. Avoid it unless you are trading, that is, enter and exit within a short period. The volumes are being effectively manipulated and controlled by the syndicates. You may not be able to exit or exit with a big loss if you cannot extricate yourself in time. Volume could be extremely low at times, not liquid, when the syndicates want to trap and slaughter the novices, meaning you can buy but it's not easy to sell. You can enter but it's not easy to exit. To attract the novices, the syndicates churn the volume, making it high. This can be done easily if they control the bulk of the shares by using proxies to buy and sell among themselves. So what's your chance of winning? You will definitely lose big when you go into such counters.
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